At 6 AM ET, nothing has budged since my original 2 AM post below.
2 AM ET How could that be? I’m putting the finishing touches on a report that explains it, to be posted in Liquidity Trader in two parts. The first will be up early this morning, and the second a bit later this afternoon.
Meanwhile, back at the daily funhouse, unless something changes radically over the next 6 hours or so, New York will again open on a massive gap. The crazy has become normal. All of the moves take place over night, and then during the day New York spends the day shimmying, shaking and quaking.
Meanwhile the hourly oscillators are on the sell side following sideways churning since last night’s pop open in Asia. On the other hand there’s a 5 day cycle projection of 3630-3640 still operative. One old trendline extension suggests possible resistance at 3640. So for now, I’d look for that as a target. Additional resistance targets are at 3650 and 3660.
Trend support is suggested at 3605. Bears need to break that, and also 3600 and 3585 to have a chance at a significant reversal.
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Cyclically, there’s no reason to get bearish here. Cycles of up to 6 months duration remain in gear to the upside. A 4 week cycle high is due now, but it won’t matter if the 6-8 week cycle is dominant. Here are the price targets and theoretical timing of these expected moves.
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Are You Kidding Me?
Can this be right? Did the stock market become oversold in mid October versus Composite Liquidity. This chart said that it did. And even after this huge 2 week rally, it’s still much closer to oversold than overbought. The S&P 500 is still near the bottom of the liquidity band.
It’s very similar to a look it had in July 2011. That preceded 4 years of a relentless, virtually unbroken bullish string.
What should cause us to expect change?
This is Part 1 of a 2 part report. Part 2 will be published later today.
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